The cost of lumber has increased again after declining in September and November, and that could potentially lead to further increases in the price of new homes.
In the past four weeks lumber prices have increased by almost 20% across the U.S., the National Association of Home Builders reported this week. These high lumber prices have already added thousands of dollars to the cost of new single-family homes and apartment dwellings. In August, the NAHB said that the price of a typical new single-family home has risen by around $14,100 since April 17 of this year, while the cost of a multifamily home has grown by $5,300 in the same timeframe.
The median sales price of a new single-family home was $330,600 in October.
“Indications are that lumber producers are reducing production heading into the slower winter building season, even as new residential construction continues to outpace seasonal norms,” the NAHB reported.
Lumber prices hit a record high in September as the COVID-19 pandemic continued unabated, though they unexpectedly declined in October through to mid-November.
However, the NAHB said a decrease in tariff prices might provide some relief. Tariffs on shipments of Canadian softwood lumber to the U.S. are currently at 20%, but later this month will fall to just 9%.
Chuck Fowke, chairman of the NAHB, said in a blog post that this was a step in the right direction as tariffs have been a big factor in the lumber market’s unprecedented price volatility. He added that the higher prices were a concern as they’re having a negative impact on housing affordability for many Americans.
The United States needs to work with Canadian officials to end the tariffs and achieve a long-term, stable solution in the lumber trade that provides for a consistent and fairly priced lumber supply,” Fowke said.